Issue link: https://maltatoday.uberflip.com/i/269668
maltatoday, SUNDAY, 2 MARCH 2014 News 17 The 'edification' of history modernisation of the Maltese econ- omy, bringing it out of a centralised system into a functioning social mar- ket economy. I look back with satis- faction at the work done, and thank Dr Fenech Adami for his direction, advice and support…" But the man who introduced VAT also feels the need to correct some details "for the sake of historical cor- rectness". Among the contested memories are Fenech Adami's 2004 choice of European Commissioner, which the former prime minister reveals had been first offered to Richard Cachia Caruana then to John Dalli, before eventually going to Joe Borg after both refused. In the book, Fenech Adami hints strongly that the reason for Dalli's refusal at the time con- cerned an ambition to succeed him as party leader. "John decided to stand for the leadership after declining my offer to nominate him as European Commis- sioner… [he] was not keen at all but said he would do it if I insisted. Had he said yes, I was obviously aware he would not have been able to stand in the leadership contest. But I had no intention of pushing him." Dalli himself however remembers the incident differently. "I had a meeting with Dr Fenech Adami at his house where I went to inform him of my intention to contest the leadership of the party. In our discus- sion he mentioned to me that he had asked Dr Joe Borg to take the post of EU Commissioner and that he was waiting for a reply from him. At the same time he asked me 'You would not have been interested in the post would you?' Knowing that Dr Joe Borg would accept this post and not wanting to create any conflicts, I told him that I was not interested." Conflicts were however created, es- pecially between Dalli and Lawrence Gonzi. As Fenech Adami recalls: "John became foreign minister but within a matter of months he was forced to resign from government in acrimonious circumstances after he instructed other ministries to buy air tickets from an agency in which his daughter had an interest. This was clearly a mistake, though John claimed that the real reason behind his departure was a false report by a private investigator, Joe Zahra…" John Dalli himself describes the same incident as "the 2004 attempt to imprison me", and admonishes the former prime minister for "re- producing the points made by the Gonzi camp on this issue". "I regret that Dr Fenech Adami makes some defamatory remarks in this context. He states that I in- structed other ministries to buy air tickets from an agency in which my daughter had an interest. I did not instruct any other ministry to do any such thing, and my daughter had no interest in the agency in question. A correction would be appropriate..." As for the Joe Zahra report, Dalli hints that the decade-old controver- sy may not be over yet. "[Fenech Adami] states that the is- sue was about airline tickets – which facts have shown was only a smoke- screen as the thrust against me was the fraudulent Zahra report which was then sent to the police in an at- tempt to arraign me and throw me in jail," he told MaltaToday. "It is still a mystery why Commissioner John Rizzo did not investigate the people who were behind Zahra in this char- acter assassination. Some new in- formation has come my way on this case, and I am seeking legal advice to see whether it is possible to ask for a reopening of the investigation." He also hints at a conspiracy to pre- vent him from contesting the 2008 elections. "It must be said that even on the air ticket case, the auditor general declared that I did not act wrongly in any way. It is also a mys- tery why Mr Joe Galea, the auditor general at the time, did not publish his report for more than three years. If I had not pushed for it would have probably been left until after the elections of 2008. Was the plan to strike me off the candidate list for the 2008 elections?" Even on the subject of his eventual reconciliation, Dalli accuses Fenech Adami of pushing the Gonzi line. Fenech Adami writes that "John's departure caused a rift between him and Lawrence that has never healed despite Lawrence's attempts to re- habilitate him." Dalli retorts that his 'rehabilitation' was due to political necessity, and came about on his own insistence. "The rift between me and Gonzi was caused because of the attempt to destroy me and my family. Gonzi never apologised for his actions even when he was proved wrong both by the courts, and by the be- lated report of the auditor general. Gonzi had proof that the Zahra re- port was fabricated only a few weeks after my resignation in July 2004. He continued to hide behind the air ticket excuse to keep me out of Cabinet. Several times I made con- tact with Gonzi to try and get him to make a statement to clear my name. He procrastinated and evaded any solution…" Gonzi's hand, Dalli claims, was eventually forced. "It was after the lapsus made by Joe Saliba on a 'Reporter' programme in which he stated that I resigned so that the police can investigate re- ports that were made – obviously referring to the Zahra report – that I put my foot down demanding that Gonzi stops making excuses. With an election looming, Gonzi agreed to hold the joint press conference that we gave in November 2007. After the election of 2008, the "re- habilitation" planned by Gonzi was an offer of "a position in tourism" – which I refused. Then came the mega ministry of social policy. VAT is the question Outside politics there are areas – admittedly far fewer – where Eddie Fenech Adami's recollections have also been contested. The former prime minister reveals in his mem- oirs how hurt and irritated he had been when the Small Businesses Chamber (GRTU) opposed the in- troduction of VAT in 1994. In so doing, he singles out GRTU director Vince Farrugia for criticism. "He [Vince Farrugia] objected to the timing of introducing VAT, when, for financial reasons and credibility's sake, we had no choice; and he said it would have negative implications for retailers, in partic- ular the requirement to install cash registers. I always gave Farrugia the benefit of the doubt whenever peo- ple accused him of being in cahoots with Sant, because he is very much his own man, but there is no doubt he did a lot of harm to us at the time. He was actively encouraging retailers to find ways around paying VAT." Contacted this week, Vince Farru- gia denies that his motivation was to assist in tax avoidance, and reminds the former prime minister that the GRTU was instrumental in assist- ing with the VAT introduction in other ways which are not described in Fenech Adami's memoirs. "John Dalli as minister of finance and the tax authorities knew that my target was to have the maximum of traders come in on the VAT tick- et and eventually on honest income tax returns. But there was a lot of bridges that needed to be built be- fore this could be achieved." His main aim, Farrugia adds, was to defend traders' interests so that they would eventually come on board with VAT without facing un- just penalties. "For this reason, I worked with the tax authorities on a spontane- ous declaration that needed to be presented by refund applicants that would, as indeed it did, put trad- ers and retailers and participating service providers squarely in the tax-abiding regime. With John Dalli I also worked on other schemes that later made it easy for various groups of self-employed to come on board. Dr Fenech Adami forgot or did not have the space to detail this." He does however concede that Fenech Adami was not alone in his perception of an undeclared agenda. "There were of course those who backed us, believing it was some tax avoidance campaign and there are those who still believe that that is what it was all about. The truth is that those who joined us for the wrong reason soon learned they were on the wrong bandwagon. Some went on to establish on their own." Former prime minister and Labour Party leader Alfred Sant criticised Eddie Fenech Adami's "money no problem" political attitude Fenech Adami said that GRTU director Vince Farrugia (pictured), "did a lot of harm" when he encouraged retailers to "find ways around paying VAT"